TGERC Approves Telangana’s First 1,500 MWh Utility-Scale Battery Energy Storage Project

The Telangana Electricity Regulatory Commission (TGERC) has approved the state’s first utility-scale standalone Battery Energy Storage System (BESS) project, marking a major step toward strengthening grid stability and improving renewable energy integration in Telangana. The common order was issued under the leadership of Chairman Dr. Justice Devaraju Nagarjun and resolved two petitions related to tariff adoption and procurement approval for a total storage capacity of 1,500 MWh.

The project was initiated under the Ministry of Power’s Viability Gap Funding (VGF) scheme, which is supported by the Power Systems Development Fund (PSDF). To implement the project, the Government of Telangana appointed Telangana Power Generation Corporation Limited (TGGENCO) as the nodal agency responsible for conducting the global competitive bidding process.

The battery storage systems will be developed under a Build-Own-Operate (BOO) model with a contract period of 15 years. The facilities will be installed on vacant land owned by TGTRANSCO. The total storage capacity has been equally divided between two substations. A 750 MWh system will be established at the Maheshwaram 400 kV/220 kV substation, while another 750 MWh system will be set up at the Choutuppal 400 kV/220 kV substation.

The bidding process was conducted through an e-Reverse Auction on the Bharat Portal and attracted participation from 16 bidders. Following the competitive process, M/s Sarus Infrastructures Private Limited emerged as the successful bidder for the Maheshwaram project with a tariff of Rs. 2,98,000 per MW per month. M/s Coal India Limited secured the Choutuppal project with a tariff of Rs. 3,14,000 per MW per month.

Before approving the project, the Commission conducted a public hearing on June 18, 2026. Several stakeholders raised concerns regarding the discovered tariffs, procedural issues, and differences in tariff levels between the two project locations. Some participants also questioned why tariffs were higher compared to similar projects in neighboring Andhra Pradesh and expressed concerns about TGGENCO’s role in the procurement process.

In response, the petitioners explained that Telangana’s project involves battery systems capable of providing four hours of discharge, unlike some projects in other states that offer only two-hour storage. They stated that the longer discharge duration is better suited to Telangana’s power demand patterns and will help manage excess solar generation during the daytime while reducing dependence on expensive power purchases during peak demand periods.

The utilities also informed the Commission that the initially proposed trading margin of 7 paise per unit had been renegotiated and reduced to 0.5 percent of the capacity charges, resulting in significant savings for electricity consumers over the project’s lifetime.

After reviewing all submissions, the Commission approved the discovered tariffs and recognized the project as Telangana’s first large-scale standalone battery storage initiative. TGERC also directed the State Load Despatch Centre to closely monitor operational performance, including efficiency, battery degradation, and financial benefits, and submit regular reports. The approval now enables TGDISCOMs and TGGENCO to execute the required agreements and move forward with project implementation.